Antitrust regulators have started to worry about the negative effects of a recent health insurance merger. | Courtesy of Shutterstock

U.S. antitrust regulators are concerned that a
proposed $48 billion merger between two of the largest health insurers in the
nation -- Anthem Inc. and Cigna Corp. -- will compromise competition in the
health care industry.

Earlier this month, officials from the Justice
Department and over a dozen state attorneys general reportedly met with company
representatives to discuss their concerns over the merger.

Groups representing physicians and consumers opine that
if the plan gets approved, the merger could mean increased premiums for 53
million consumers across the country.

California regulators have announced that they will
recommend that the Department of Justice prevent the merger.

“Generally,
mergers in the health care industry don't appear to be creating any kind of
innovation,” Yevgeniy Feyman, senior
research assistant for the Harvard T. H. Chan School of Public Health, recently told Patient Daily. “Merging insurers will
argue that they'll be able to keep down costs through their market power and
deliver more integrated care to patients. The former is true, but research has
consistently found that, nevertheless, these savings don't flow through to
patients in the form of lower insurance premiums. The latter is an open
question, though I'm skeptical.”

In some cases, companies planning to merge may
obtain approval from the government by offering to sell assets or agreeing to
other restrictions.

According to lobbying records, in 2015 alone, Anthem
and Cigna spent over $13.6 million in lobbying efforts and hired 53 federal
lobbyists, some of whom had worked in the Justice Department’s antitrust
division.

Feyman, who is also an adjunct fellow
at the Manhattan Institute, said that
the most innovative thing insurers have brought in recent years are narrow
networks, which he believes are not innovative enough to justify permitting the merger between insurance giants.

“On CT's exchange, ConnectiCare has a
dominating market share, and Anthem is trailing in third place as far as I
understand,” he said. “Unless Cigna has captured some significant share of the individual
market in CT, this merger isn't likely to affect the exchange. That
being said, if this merger leads to Anthem-Cigna entering the exchange more
aggressively, it might result in a benefit if their plans are competitive.”

Adding more controversy to the proposed plan is a
recent vote by state officials in Connecticut to launch a formal ethics inquiry
into Connecticut Gov. Dan Malloy’s appointment of former Cigna lobbyist and
insurance regulator Katharine Wade to head the state’s antitrust review of
Cigna’s proposed multibillion-dollar merger with Anthem.

After the International Business Times reported the
link between Cigna and Wade -- and large campaign donations from Cigna and Anthem
to political groups affiliated with Malloy -- Connecticut Common Cause filed a
petition requesting a ruling by the Citizen's Ethics Board in Connecticut on
Wade’s potential conflict of interest.

Wade’s husband reportedly works for Cigna; her
father-in-law is listed in court documents as representing the company; and her
mother and brother have also worked for the insurer.

Feyman said it is hard to say whether
Wade’s ties to the health care industry have influenced her decision-making in
reviewing the proposal.

“Of course, we have to be careful of
the revolving door,” he said. “That being said, regulators should have a strong
understanding of or experience in the industry that they're regulating.”